Traditional And Self-Publishing Contracts – When To Just Say, NO!

At ThrillerFest this year (a writing conference in NYC for, you guessed it, thriller writers), I moderated a panel on negotiating publishing contracts. The panel consisted of two agents, two publishing lawyers, and two authors. One question that evolved from the discussion was when should a writer walk away from a publishing contract.

I have summarized the discussion below with some helpful guidance should you be faced with the possibility of walking away from a publishing deal.

The Traditional Publishing Route

a) Unreasonable contracts terms

With all the shifts and upheaval in the publishing industry, a writer might feel pressured to sign a publishing contract “as is” thinking the offer is a take-it-or-leave-it proposition. I understand the mindset. A writer likely has been waiting patiently for an offer to attend the publishing dance. She wants to sign the agreement quickly and keep the publisher happy before they can rescind the offer.

But beware. Rushing to the dance floor too quickly can have profound and unwanted consequences when that contract is not in your best interest.

Before you start negotiating better contract terms, know your bottom line or the point at which you will reject a deal. Start by understanding your long-term goals. Then, create a business plan for your book and career. If you do, then you will know quickly if a publishing deal you have been offered will help you reach those goals and plans.

Most publishers are willing to negotiate the terms in their publishing contracts. Others are not so flexible. Just understand that some terms are industry standards, which the publisher will refuse to negotiate (like standard royalty rates unless you have power as an established author who can demand a larger percentage). Other terms are not set in stone. If you feel a clause in your publishing contract is unfair or unreasonable, discuss it with your agent and suggest changes. If you do not have an agent, hire a publishing lawyer to review the contract.

A few unfair terms to watch for:

A publisher claiming ownership of the copyright — The copyright always remains with the author. You grant a license to the publisher to commercial exploit the copyright in your work.

A poor grant of rights clause – Some publishers sneak in a rights grab, i.e. extending rights beyond what they need to publish your book. See my earlier Sidebar Saturdays article with tips for negotiating the Grant of Rights clause.

Royalty rates below industry standards — If the publisher requests you take a reduced advance and/or a reduced royalty rate below industry standards, push back. You deserve what the industry will pay. Ask for it. Do not agree to repay a portion of the advance if the book does not sell. Losing an advance is the risk the publisher incurs by agreeing to publish your book.

Poor non-compete clauses — These tend to be overly broad and vague. Some non-compete clauses bar authors from self-publishing. Some are indefinite, so attempt to limit the non-compete period to a specific time, like 1-3 years after publication. Limit the subject matter of the clause so it does not prevent the writer from working in other genres, or on any related prequels, sequels, and characters the writer might want to explore once the book publishes.

Poor or no termination rights — The last thing you want is for the publisher to have control of your creative work for an unlimited amount of time. Make sure the contract has a limited term, and is fair to both parties, not just the publisher. For example, rights should revert back to the author: if your publisher never releases the book after a specified amount of time, if your sales are below a specified dollar amount, if your book is “out of print” (although be careful with how this term is defined because print-on-demand and eBooks if available can mean the book is still in print). If the publisher wants to maintain control for a longer term, then the publisher should pay for it.

b) An inexperienced or inept publisher

Whether your publisher is large or small, check the publisher’s ability to publish and distribute your book. Due diligence is imperative on your part if you are going to make an informed decision.

Ask thorough questions like: What resources does the publisher have available to produce and distribute your book? What is the publisher’s reputation in the industry? How long has the publisher been in business? How many books has the publisher released? What is the quality of their books? What is their track record with other authors?

The Self-Publishing Route

If you have decided to self-publish, then you are either hiring a self-publishing service to produce the book and distribute it, or you are hiring the editors, designers, and other professionals needed to produce and distribute your book, or you have a hybrid of the two.

Like with traditional publishing contracts, self-publishing contract terms can be abusive too. Be on the look out for the following predatory contract terms and entities that exist only to make a buck off a writer’s hard work.

A vanity press – These are the companies that charge you to “publish” your book, when all they do is format and print. They might claim to be a trade-publisher. They might charge a fee for a basic publication package, then up-sell items and services to the author that are either worthless or overpriced. Often, the vanity presses never market the book and make false claims about their distribution abilities.

A contract that requires the author to buy bulk quantities of their own books — Normally, an author can buy their own book from the publisher or self-publishing service at discounted rates. Never sign a contract that requires you to buy a mandatory number of books from a publisher or the self-publishing service. The publisher makes money by selling your book. The self-publishing service makes money by formatting and producing your book. A mandatory purchase clause is simply onerous.

A contract with a self-publishing service that attempts to grab rights – Read the contracts carefully and if you have questions, hire a publishing lawyer to review the contract. Some self-publishing contracts attempt improper rights grabs, including: the right to publish your book anywhere in the world, or claiming exclusive rights to your creative work for the life of the copyright.

As with any contract, due diligence is imperative before you sign. If the publishing deal or self-publishing contract does not further your long-term goals and plans, then walk away. Signing a bad deal with unfair terms is worse than no contract at all, especially now that authors have more publishing options.

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